It’d be easy to dismiss Oxfam’s work as alarmist, or unfair, or misleading, but they’re not alone. In 2013, Ireland was singled out as a tax haven by the United States Senate Committee on Homeland Security; In 2015, the UN’s Special Rapporteur on extreme poverty and human rights stated that “When lists of tax havens are drawn up, Ireland is always prominently among them.”; And just a few months ago Brazil added Ireland to its list of tax havens. Ireland is not a tax haven – but there’s a growing international perception that we are.
Oxfam has labelled Ireland a tax haven for three reasons. The first is that Ireland facilitates large-scale international profit shifting. This would have been a more accurate charge a few years ago. However, recent changes, in line with the OECD’s work on greater tax justice, is shutting this profit shifting down.
The second charge from Oxfam concerns Ireland’s 12.5% corporation tax rate. This is, with genuine respect for the NGO, none of Oxfam’s business. Ireland’s corporation tax rate is transparent, and entirely within our competence under European treaties.
The third charge from Oxfam, however, is material, and must be addressed. This is that Ireland has a problem with ‘tax incentives’. We do. Strong progress has been made in recent months on the so-called vulture funds. However, the previous Fine Gael government as good as made property investment for big landlords completely tax free in Ireland. And this has to stop.
The latest accounts published by Project Eagle illustrate the problem. In 2015, they made, by my reckoning, £168 million in taxable profit. They paid £1,600 in tax, or 0.001%. The recent changes to Section 110 will help with this, but their accounts also show that they have shifted about half the assets out of the Section 110 company.
We don’t know where the assets have gone. But if they’ve been moved into an investment fund, then we’ll never see them again, as they don’t have to file publicly accessible accounts. If we are to address this issue, we need to act now. We must mandate that all funds, vehicles and other tax structures must file publicly-accessible Irish accounts, tax the profits from domestic Irish property assets like other Irish companies and disallow the technique of ‘orphaning’ – which often involves Irish Charities – for the purpose of Irish tax avoidance.
The Taoiseach indicated that Government would be willing to consider any new proposals brought forward and I will be tabling these in the new year.